NEWS

July 31, 2017

The government wants CATA’s advice on how to improve SR&ED funding: Feature article by IT World Associate Editor Eric Emin Wood

That didn’t take long.

Less than a week after the Canadian Advanced Technology Alliance (CATA) officially released a report breaking down how the federal government – both Liberal and Conservative – reduced innovation funding by $5.3 billionby steadily reducing the value of Canada Revenue Agency (CRA)-issued Scientific Research and Experimental Development (SR&ED) tax credits between 2009 and 2016, the Ottawa-based organization has been asked to help develop a solution.

CATA CEO John Reid told ITBusiness.ca that after reading his organization’s report, two branches of the federal government – the Canadian Department of Finance and the Ministry of Innovation, Science and Economic Development – have asked CATA to provide one-page legislative briefs to help guide policy updates.

As a result, the organization has moved its tax and finance advocacy to a series of one-page legislative briefs aimed at providing MPs and other key government officials with a series of specific action items and consultation topics, along with their desired outcomes.

“We strongly support the intent of the review,” Reid said. “The rationalization and improvement of these historically disjointed efforts is critical to creating the innovation nation that Canada will need to compete this century.”

“The government’s process for this critical overall review and its components and parallel reviews remains particularly opaque to our members with interest in the SR&ED program,” he continued. “This is concerning, because uncertainties it creates decrease the value of the credits as a business incentive.”

CATA’s first one-page brief outlines the information the organization believes needs to be available publicly for an effective, credible and transparent SR&ED review to take place, including which ministries are responsible for what and measurable targets for proposed tax instruments; while the second suggests how the government could develop a more effective tax system that better supports business innovation and economic development.

The organization has already sent both outlines to all federal MPs.

“This discussion needs to be moved forward,” Reid said. “CATA’s tax and finance advocacy is drawn from extensive research and community feedback, and we now intend to draw all members of Parliament and key government officials into the transparent dialogue that we believe is needed as well.”

The organization is also encouraging the members of its social media groups to reach out to their local MPs during the government’s summer break to emphasize the importance of collaborating with the tech industry on its SR&ED policy review, Reid noted.

CATA senior vice president of tax, finance, and advocacy Russ Roberts, who wrote last week’s report along with CATA research director Catherine Bishop, said the request was a significant improvement over the government’s previously-announced review of current SR&ED tax incentive policies, which only vaguely mentioned conducting external consultations without providing specifics.

“It simply not good enough for the Government to simply say that they will have ‘external consultants’ help with the review,” Roberts said. “The government needs to set out the specific action items, outline the consultation/study topics, and define the desired outcomes. Isn’t that what ‘evidence based’ decision making is supposed to be about?”

The Canadian Advanced Technology Alliance (CATAAlliance) is Canada’s One Voice for Innovation Lobby Group, and is crowdsourcing ideas and guidance from thousands of opt in members in moderated social networks in Canada and key global markets. (No Tech Firm Left Behind)